The TSX may float around in the headlines, but your tax-free savings account (TFSA) doesn’t have to. To beat the index you need a dividend stock that generates cash in good and bad markets, and then shares that cash without slowing growth.
I look for three qualities: strong margins, disciplined spending and a balance sheet that remains flexible. A stable dividend keeps you invested, and true free cash flow keeps the dividend fair. When a company can also reinvest in high-return projects or buy back shares, it can turn a good decade into a great one.
Consider DPM
Dundee Precious Metals (TSX:DPM) currently fits the cash first profile. It produces gold and copper assets in Bulgaria, and expanded its platform after completing the acquisition of Adriatic Metals and adding the Vareš operation in September 2025. It also keeps the story easy to follow. It produces metals, sells at market prices, manages costs and allocates capital with a clear playbook. That simplicity is important if you want a stock that you can hold for years without needing a spreadsheet every morning.
Recent results show why investors keep coming back. In its Q3 2025 update, DPM pointed to record financial performance, strong realized metal prices and continued progress in the integration of Vareš. It also highlighted a robust growth pipeline, including work on Čoka Rakita and ongoing exploration targets that could fuel future production. Mining always brings drama, but DPM tries to keep the drama on the drilling results, not the financing.
In income
Now the earnings detail that matters most to dividend investors: cash. DPM generated $147.7 million in free cash flow in the third quarter of 2025 and reports in US dollars. That free cash flow is more important than shiny revenue growth because it funds everything you care about. That includes dividends, buybacks and development expenditures. Better yet, it can do that without continually issuing new shares. In a TFSA, that self-financing engine can grow quietly, even as the share price takes a breather.
The profit line also held up. DPM reported adjusted net earnings per share of $0.73 in the same quarter. Management also reaffirmed its all-in sustainable cost guidance for 2025, showing confidence in the levers it can control. Investors should still expect volatility because gold and copper prices never behave politely. Costs can rise, numbers can shift and currencies can fluctuate. Still, strong quarterly execution builds confidence going into the next quarter.
Looking ahead
So can it qualify as a cash-gushing dividend stock? Yes, but you need the right definition of ‘dividend’. The yield has been under 1% lately, so it won’t satisfy anyone who wants a 6% check today. DPM targets a sustainable base dividend and then uses excess cash for buybacks when it sees value. That approach can feel boring, but it often protects investors from painful cuts. If gold falls hard, the market can punish even big players, so a conservative payout can keep the gold price paying through the cycle.
The other reason DPM can beat the TSX comes from its ability to match today’s cash flow to tomorrow’s growth. Integration work at Vareš could increase production over time, and projects like Čoka Rakita could extend the life of the company beyond its current mines. Exploration can also add value without betting the entire company on one expensive deal. In terms of valuation, the dividend stock could still be valued lower if investors turn away from miners, so you can’t treat it like a utility. You should also respect commodity risk and keep your position size sensible.
In short
DPM isn’t suitable for every income investor, and that’s fine. If you want maximum yield, look elsewhere. If you want a dividend stock that generates true free cash flow, pays a dividend, and still builds its next chapter, DPM looks like an attractive candidate today. The TFSA strategy remains simple: focus on cash discipline, stay realistic about metals volatility and give compounding the time it needs.
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